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BL Premium reports the average pay of South Africans declined more than a tenth over the past year, according to the latest data from the Altron Fintech Household Financial Resilience Index (Afhri).
The figures for the last quarter of 2022, released on Monday, showed the average monthly remuneration in the formal and informal sectors declined from R18,470 to R16,370 year-on-year in real terms, namely accounting for inflation. This was in part because 1.4-million new jobs were created in 2022 in lower-paying sectors such as hospitality and tourism, which was recovering from the devastating effects of the Covid-19 pandemic as tourists returned to SA. “The other reason is Covid scared people who temporarily lost their jobs, or maybe even permanently, and they now shy away from asking for a raise in the private sector. They are just too glad to have a job,” economist Roelof Botha, who compiles the index for Altron Fintech, observed. The latest reading of the index, which gauges the finances of households and their ability to cope with debt, was 111.5. This was slightly higher than the 109.9 in the third quarter, but lower than the score of 112.7 a year ago, showing mounting pressure on households, largely because of high inflation and interest rate hikes. “Given the 2014 base level of 100, this means that the average household’s financial disposition has improved by 11.5% in real terms over nine years. However, the average annual improvement since 2014 is only 1.2%, which serves as a clear indication of the economy’s underperformance,” Botha indicated. One of the biggest boosts to households for dealing with their short-term debt was the surrendering of long-term insurance, which propped up the index.
- Read the full original of the report in the above regard by Nico Gous at BusinessLive (subscriber access only)
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